The relationship and effects between fiscal policy and economic growth have been an important theoretical and empirical research topic. The neoclassical models imply that the economic effects of changes in government spending will be neutralised by the impact of consequent changes in private spending. Endogenous growth models, on the other hand, imply that changes in the level and composition of taxation and government expenditure can affect economic growth. This aim of the paper is to explore the relationship and effects of fiscal policy and economic growth in 21 Central and Eastern European (CEE) countries over the period 2000-2018. The results, after controlling for various common and country-specific variables, imply that an increase in taxation, but not in non-productive expenditures, can positively affect economic growth. Our main findings are: (i) there is a significant and positive contemporaneous relationship between the general level of taxation and economic growth; and (ii) there is no relationship between the government final consumption and economic growth. Therefore, our results contributed to the scientific literature by providing empirical evidence on the contemporaneous relationship between the general government tax receipt and economic growth in CEE countries.

Abstract A recent popular trend in office re-design is the activity-based flexible office (A-FO). Initially, assumptions about the effects of A-FOs were drawn from research into open-plan offices where lack of privacy, concentration opportunities, and an increase in distractions are identified as main downsides. These aspects have not been explored sufficiently in the context of A-FOs. Using a longitudinal within-subjects design with three measurement times, we focussed on analysing the change in distraction after moving to an A-FO, how distraction-affected important work-related outcomes, and what factors moderated these relationships. Results showed that moving to the A-FO had negative effects on distraction, work engagement, job satisfaction, and fatigue. The negative effects of distraction were more pronounced in situations of increased time pressure and unpredictability. The obtained results highlight the harmful effects of the interaction of work stressors for employees’ motivation and well-being. Practitioner summary: The results of our research provide important insight into how moving to an activity-based flexible office impacts the employees. Besides having quiet zones for concentrated work to avoid distractions managers and leaders should also focus on taking care of work stressors to avoid fatigue and loss of motivation.

This chapter examines the financial performance efficiency of the restaurant sector in Croatian counties over the period 2013–2017. Today's tourists are ambitious explorers who travel in order to find and explore new experiences and motives for travelling as long as there are interesting things, activities and offers which correspond to their preferences. Among the many motives that today's tourist decides to travel, gastronomic tourism certainty plays an important role. The observation period began in 2013, since that was the year when Croatia acceded to the European Union and joined all the other prominent European food destinations. In order to evaluate the financial performance efficiency, the methodology of the data envelopment analysis (DEA) was applied separately to the data processing of each year. The results of the Charnes–Cooper–Rhodes model showed that only four counties (Lika-Senj, Zadar, Istria and Dubrovnik-Neretva) achieved continuous efficiency over the whole observed period. In 2013 the results of scale efficiency showed that 10 counties (Krapina-Zagorje, Karlovac, Bjelovar-Bilogora, Lika-Senj, Požega-Slavonia, Zadar, Sibenik-Knin, Split-Dalmatia, Istria and Dubrovnik-Neretva) achieved a score of 1, and in later years there was a decrease. One of the main obstacles of the existing inefficiencies in the entire restaurant sector in Croatian counties is certainly changeable tax legislation and lack of employees in the restaurant sector.

The world agriculture uses about 70% of the world water resources in irrigation. The concern over the sustainability of water use as demand for agricultural, industrial, and domestic uses continues to increase. Conflicts between particular sectors result in tensions, which sometimes lead to “water wars” in different parts of the world. It is the reason why many national and international organizations are putting the water quantity and quality questions on the top of the world’s open questions/problems. The main aim of this paper is to present soil water balance of the Mediterranean region of Bosnia and Herzegovina, prepared for a long-term time series for two locations (Trebinje and Mostar) annually and during the vegetation period. The mean long-term data has been used as a base for future predicted calculation. The predicted PET was based on an increase in air temperature by 2°C and predicted decrease in precipitation by 25%. With so predicted calculated data of monthly PET and monthly precipitation the predicted soil water balance was done.

Abstract In a dynamic market, the city has become a main source of competitiveness, along with financial and economic benefits. Due to the processes of digitalization, a new concept has been developed, namely smart cities. This concept delivers economic and financial potential, not only to cities, but also to urban and local economic development. Therefore, to ensure the establishment of this concept, local government units, i.e., cities, need to have enough financial resources. In addition, the fiscal capacity of their local budgets should be sufficient. The objective of this paper is to evaluate the fiscal capacity of large cities in Croatia over the 2016-2018 period, as well as to present the financial support through funding schemes for the establishment of smart cities. After calculating the level of fiscal capacity of large cities, the analysis revealed interesting results. Only four large cities (Split, Rijeka, Zadar and Pula) achieved positive fiscal capacity in the observed period. This provides evidence of fiscal performance and fiscal capacity for the establishment of smart cities. This concept will enhance the quality of life, stimulate economic growth, sustain local government budgets and create new value for both investors and the local population.

Znanstvena monografija sadrži znanstvene radove sudionika međunarodne znanstvene konferencije pod naslovom Economics of digital transformation - Smart Governments, Regions and Cities u organizaciji Ekonomskog fakulteta u Rijeci. Rezultati istraživanja se odnose na razvoj i perspektive pametnih gradova i regija te ostale izazove digitalizacije i digitalne transformacije gospodarstva i drustva.

Offering an efficient healthcare system is one of the main focuses of economic development for every country in the world, including Croatia, in order to achieve a better quality of life and healthcare protection. As a result, there is also a higher standard of living for the citizens. The healthcare system in Croatia has undergone a number of reforms. For each of the implemented reforms, the objective was to optimize the healthcare system in line with the government’s budget to achieve sustainability in the long run. Therefore, the healthcare financing system and sustainability play an important role. The objective of this paper is to evaluate and analyze the efficiency of average healthcare expenditures in twenty Croatian counties by applying the data envelopment analysis approach. The analysis was conducted for the 2010-2017 period. To assess the performance of the counties, we used three inputs and three outputs. The results revealed significant differences in the efficiency of healthcare expenditures among the Croatian counties. Therefore, the results of scale efficiency showed that, among the twenty Croatian counties, only six counties (Brod-Posavina, Koprivnica-Križevci, Lika-Senj, Međimurje, Vukovar-Srijem and Zagreb) operate at the maximum score.

Abstract The aim of this paper is to examine performance of pension funds in Croatia, or more precisely, to measure the technical efficiency of mandatory pension funds. The main role of the pension funds is to collect and invest the money contributed by the employer or the employee during working years until retirement. Therefore, development of pension funds as institutional investors is especially important for capital markets as well as for the whole economy. By applying the methodology of data envelopment analysis on a sample of 12 DMUs, i.e. four mandatory pension funds divided into three categories (A, B or C) for 2015-2018 period, we provide further evidence on their efficiency level. The results have shown very small differences among relative inefficient pension funds.

Russia features complex and rather centralized structure of public finances. The federation controls the majority of tax revenues, partially allocated to the regions, and the public expenditure in respect of regional public goods is done via direct regional expenditure, as well as via federal programs and federal grants, depending on which level of administration is responsible for the said public good. In any case these expenditures need to be efficient partially due to limited resources of the regions and partially due to cost-limiting approach of the Russian public authorities. Numerous studies analyzed the efficiency of public expenditures at the level of central, regional or local governments; however, there was only limited and partial analysis of public finances of Russian regions, without detailed estimates of efficiency of expenditures or comparison across geographically close regions. Therefore, authors intend to cover this gap in scientific literature. The objective of this paper is to estimate the technical efficiency of regional public expenditure, with special emphasis on regions of Russian Federation located in Volga Federal District in the period 2013-2017. Volga Federal District includes fourteen administrative regions, all of which feature developed industry and infrastructure but vary in terms of social development. To evaluate the technical efficiency of public expenditures in the regions of Volga Federal District in the period 2013-2017, the authors used the Data Envelopment Analysis (DEA) methodology to process data, following Charnes, et al. (1978). The DEA model inputs comprise total expenditure for education and total expenditure for health care of each region, while two sets of outputs consist of (1) teacher-student ratio at all levels of education and number of medical doctors per 10,000 inhabitants and (2) number of students at all levels of education and number of clinic visits per doctor per year. The DEA model identified significant differences in the efficiency of expenditure on education and health care across regions of Volga Federal District; however, there was no expected correspondence with the size and economic development of the regions (regions with larger population and economy were expected to be more efficient, but the model suggests otherwise). The authors further examine the potential causes of regional public expenditure in the examined sectors of education and health care.

The public sector and public governance play a crucial role in the contemporary society which takes care of social needs. Therefore, it is not surprising that good governance has often been used to explain good economic performance as well as the well-being of a society over the last decade. However, the business sector often represents a channel through which public governance affects economic performance, which has largely been neglected in the existing literature. In this context, not much is known about the role of public governance in promoting research and development (R&D) in the business sector in the EU. Therefore, this article aims to explain the interaction between the public and business sectors in a crossnational setting by investigating the relationship between different public governance practices and business R&D activity. The aim is to be achieved by applying a multiple regression analysis on a cross-sectional dataset of EU member countries. The empirical results show the following. First, they reveal that, in general, public administration in the EU is predominantly based on neo-Weberian state rather than New Public Management governance practices. Second, they reveal that public governance practices have important implications for business R&D activity. They show that impartiality, accountability and efficiency enhance business R&D activity in the EU, while closeness deteriorates it. The findings of the article are especially beneficial for contemporary governments and policymakers to establish appropriate public governance and policy practices in the future.

To determine the efficiency of regional and local government public functions, the most used method in the empirical analysis is data envelopment analysis. This paper reviews 20 counties as part of regional government units in Croatia as well as the relationship between efficiency scores and exogenous determinants in the 2009-2016 period. The results of our analysis show that, among exogenous determinants, only the annual registered unemployed rate and annual average wage for full time jobs are statistically significant.

Abstract The role of local government units and the level of fiscal autonomy are the main drivers of local development activities in countries. The aim of this paper is to measure the level of fiscal autonomy of large cities that have been identified as conductors of local development activities in three Southeastern European (SEE) countries, namely Croatia, Serbia and Bosnia and Herzegovina, as well as to compare the level of fiscal autonomy between large cities and other remaining local units in the respective countries. The results of the research measured by the index of fiscal autonomy and compared with the index of fiscal autonomy of all remaining local government units in each of these countries indicate limited fiscal autonomy. Th is research provides new scientific evidence and fills the gap regarding the level of fiscal autonomy of large cities to improve and increase their budget capacity.

Abstract Background: In recent years’ income inequality has been an economic issue. The primary instrument for redistributing income is personal income tax. However, based on economic theory income inequality concerns indicators such as wages, transfer payments, taxes, social security contributions, and geographical mobility. Objectives: The objective of this paper is to examine the impact of certain labor market indicators on personal income taxation in Federation of Bosnia and Herzegovina (FB&H). Methods/Approach: Since personal income taxation consists of a very broad definition and for the purpose of this research only, income from dependent (employment) activity is observed. The econometric analysis is conducted using error correction modeling, as well as forecast errors variance decomposition. Results: The error correction model is estimated, and the cointegrating equation indicates that monthly wage and number of employees statistically significantly positively affect personal income taxes in FB&H in the long-run. After two years, the selected labor market indicators explain a considerable part of forecasting error variance of personal income tax revenues. Conclusions: The implementation of reforms in the labor market and tax policies of the FB&H is suggested. In order to achieve necessary reforms, efficient governance and general stable political environment are required.